Tag Archives: Alcohol Market

Australian wines focus on India paying rich dividends

Australia’s industry is different. It is much more mature, and our climate allows for a more diverse variety of wines to be produced. So it isn’t a “like for like” comparison. In fact, we see no real competition between the domestically produced and imported wines. Both are targetted to different parts of the society. Domestic wines are often perceived as “value for money”.

Imported wines often carry a perception of quality among Indian customers who are willing to pay a premium. According to some statistic, imported wines account for about 35% of the country’s total wine consumption in terms of value but only about 12% in terms of volume.

Australia is looking at the upper end of the spectrum in wines, we see an opportunity for Australian labels to offer an experience to consumers.

The diversity and quality we can offer, gives us the ability to provide consumers with something that few new world countries can.

What experiences of Asian markets would you like to bring to the marketplace?

The Indian wine market is in a nascent stage, especially for imported wine. We are delighted to see wine culture slowly evolving and consumer adoption growing.

As the industry continues to grow, we are hoping to see more advanced matching of wines and foods. Cobranding of wine experiences with other activities, like premium tourism. Curated experiences that take the consumer on a journey. Tasting rooms, which we see coming up in Maharashtra soon, are something we are working on.

Our main aim is to see wine transformed from consumption to experience in the mind of the consumers.

Exports of Australian wines in glass bottles have grown 2% in value and unpackaged wines by 13%, what are your comments? Do you see an opportunity for bulk wine exports to India?

There is an opportunity for bulk wine. But current duty structures don’t really make it viable. There is no significant cost saving to import bulk as custom duty remains same for bottled and bulk wine. It’s not something we are looking into right now.

We do see opportunities for private labels in India and have had success with Australian brands developing private labels for Indian organisations.

What kind of pricing strategy should Australian wines adopt as the global trends are for low-end wines and high-end wines?

Brands should consider a multi-pronged strategy. Offering an entry level wine to generate awareness of their label in the market. Support this with a more premium offering, that elevates the perception of quality.

What are your comments on the growth of wines in value (less than $2.50 per litre) by 8% and that of high-end wines ($50 and more) increase by 34% in value?

This is a very encouraging trend. It shows a maturing of consumers’ pallet and an appetite for a premium experience.

As has been the case all around the world, as the industry matures, consumers’ pallets become more sophisticated and the premium segment emerges. We also see this trend in the fact that importers are not only seeking entry level wines, but also mid and premium level wines

Australia has unique position in Indian market. Australia has significant market share not only in wines value less than $2.50 per litre, but also high-end wines, too.

Australian wines have an approximately 23% market share, and a little over US$ 6 million in value. What target would you like to set for yourself in terms of market share and value?

We are very proud of our position in the market. It’s something we want to hold on to and grow. We haven’t set targets in terms of overall dollar value. We want to focus on creating a brand for Australian wine, as we feel this will give the best outcome.

Importantly, younger generations, particularly the age group of 20-35 years, is the emerging consumer segment for wine. This is due primarily to an exposure to Western culture.

Austrade India have a significant presence on the ground. Austrade has offices in six Indian cities (Mumbai, New Delhi, Bangalore, Chennai, Kolkata & Hyderabad). We are working closely with Indian importers and providing personalised one-on-one service to understand importers’ requirements to expand their portfolios and connect with Australian wineries. Austrade is playing an important role to maintain and grow Australian market share in imported wines in India.

With a very low per capita consumption of wine (a tablespoon) and total consumption of 30 million litres how would you rate prospects of Australian wine in India?

With the market being in a developing state, there is huge potential for Australia.

Historically, India has been a market for spirits and beer and wine consumption has been limited by availability of domestic wine as well as the high cost of imported wines.

In a country with a billion-plus population, it is estimated that wine in India has penetrated only a small segment of the population so far, resulting in low capita consumption of wine. Wines are increasingly becoming popular among younger generations and are now being served at functions, events, Indian marriages, and gifting.

Australia’s proximity to India, in comparison to other wine producers, gives Australian exporters a slight advantage. Not only are freight cost moderately cheaper, but diplomatic relations are strong due to our shared democratic values and large Indian diaspora in Australia.

The position of Australian wine and its wineries is critical. We want consumers to think of Australia in terms of a premium brand for wine – A leader in the new world.

With India being such a young country (by demographics and at heart) we’ve taken a long-term vision for the market.

With India importing about 500,000 cases of wines per annum what is the scope for Australian wines in India?

With the market being in such a developmental state, there is huge potential for Australia. The amount of wine imported will grow over the coming years and if Australia can establish its brand in the market it will be a big part of that growth.

Many well-known Australian wines are not present in India – Jacob’s Creek, Hardy’s, Yellowtail are three accessible brands. For consumers looking to explore Aussie labels and varieties further there is Yalumba, Torbreck, Two Hands, Penfolds, Lindeman’s, Wolf Blass and Debortoli available across a range of state, just to name a few.

Imported rosé is witnessing increased interest due to its versatility and food pairing. Rosé is often discussed as an excellent wine to pair with vegetarian food. It suits the Indian palate as it is light and fresh like white wine, but with the body and fruitiness of a red wine. Blush-coloured medium sweet Moscato wines that are low in alcohol content are emerging as a trend amongst health-conscious consumers. This is something Australia can bring more of to the market.

“Wine-in-can” is a new segment that is targetted primarily at millennials for on-the-go consumption. We’ve already seen success for Australia in this area with Barokes.

All these trends support the notion that Australia will continue to be a leading choice for consumers in India.

With 19 million young people entering the drinking market each year and with young people a prime target audience for wines, how do you plan to address this target and the general wine drinking audience?

The perception of wine needs to be looked at. For a long time, wine has held a distinct position in the Indian consumers’ mind. It has been seen as a sophisticated and stylish drink as compared to other alcoholic beverages, like whiskey, scotch and rum that are considered men’s drink or gin, which might be considered a preference for females.

But the thing with wine is there are so many different varietals and tastes, that there is a type of wine for everyone.

If we can bring exciting options, like rosé or different sparkling varieties I think it can really excite new consumers and appeal to broader tastes.

Right now, wine consumption in India is largely limited to urban areas and metropolitans. Austrade advises its Aussie labels to focus not only on metros, but also to look at tier-2 and tourist locations.

Younger wine drinkers in India are an experimental group who are searching for new experiences; an appetite we hope to satisfy with Australian wine.

Beam Suntory global sales up 11%, India and China key markets for future growth

Beam Suntory, a world leader in premium spirits, reported full-year 2021 results, with sales up 11% globally. These results also demonstrated strong growth versus the pre-pandemic year of 2019, with sales also up 11% over the past two years.

The company’s 2021 results were led by sustained strength in off-premise sales, and very strong performance in markets where bars and restaurants reopened faster than expected. Markets including Germany, Russia, Spain, emerging Asia and Global Travel Retail all grew at double-digit rates, as did China and India, key markets for Beam Suntory’s future growth ambitions. Sales in the U.S. grew high-single digits, bolstered by robust demand for premium brands. Sales in Japan, up mid-single-digits, benefitted from strong demand for convenient ready-to-drink beverages like -196x but were impacted by extended on-premise restrictions.

Premium brands to the fore

By brand, results underscore the strength of consumer interest in premium brands. Sales grew double digits for brands including Maker’s Mark, Basil Hayden, Knob Creek, Booker’s and Legent bourbons, Laphroaig, Bowmore and Auchentoshan scotches, Hibiki, Hakushu and Toki Japanese whiskies, Sipsmith and Suntory Roku gins, and El Tesoro and Hornitos tequilas, while On the Rocks (acquired in 2020) continued to show exceptional growth. Beam Suntory’s flagship Jim Beam also demonstrated solid growth despite glass supply constraints affecting certain bottle sizes.

“We’re immensely proud of the results our business has been able to deliver in the face of historical challenges related to the pandemic, including on-premise closures and supply chain constraints,” said Albert Baladi, president & CEO of Beam Suntory. “Our results underscore the strength of our premiumisation strategy that relies on exceptional quality, superior storytelling, and executional excellence across consumer touchpoints.”

Strategic moves with accelerated investments

“Our confidence in the future is reinforced by the strategic moves we’re making, with accelerated investment in our business — including capacity, capabilities and our sustainability agenda — the 2021 acquisition of our route to market in Spain, and our upcoming joint innovations with Boston Beer. The people of Beam Suntory look forward to delivering another year of outstanding performance in 2022.”

Beam Suntory launched Proof Positive in 2021, the company’s comprehensive sustainability strategy, representing a $1 billion+ commitment to making a positive impact on nature, consumers and communities.

The key Proof Positive developments during 2021 include renewable energy usage; water conservation; sustainable brands; consumer focus and DEI (diversity, equity and inclusion).

Renewable Energy Usage: All global manufacturing sites began purchasing renewable electricity (or renewable electricity certificates) in 2021, with the goal of 100% renewable electricity usage at across operations by the end of 2022. The Fred Booker Noe Distillery opened in 2021 in Clermont, KY powered by an electric boiler using renewable electricity. In 2022, a pilot project to generate “green” hydrogen will commence at the Ardmore distillery in Scotland. This work supports the company’s commitment to the Race to Zero initiative.

Water Conservation: Closed-Loop Cooling systems were installed in two of the company’s Kentucky distilleries, significantly reducing water usage. Through watershed sustainability collaborations, the company established the first Peatlands Water Sanctuary (Scotland) and the Charco Bendito Project (Mexico).

Sustainable Brands: Sipsmith Gin & Maker’s Mark both achieved B Corp certification in 2021. B Corp Certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials.

Consumer: Beam Suntory has increased options for low and no-ABV drinks with products like Sipsmith FreeGlider and the expansion of Lemon Sour Zero. The company is also applying nutrition labelling to key brands across Europe and the U.S. as part of its voluntary commitment to provide nutrition information and alcohol content information on packaging or online for all products by 2030.

Diversity, equity and inclusion (DEI): The percentage of female new hires increased 6% to 50% in 2021, with the US multicultural employee population increasing by 4% at both the mid- and senior-manager levels. New and expanded opportunities for internal multicultural talent also increased, accounting for 19% of US promotions and 21% for lateral promotions.